Houston’s urban core is seeing residents shift outward. Seeking a lower cost of living, many are choosing to relocate to towns within a 30-mile radius, which still affords them easy access to the city.
Retailers appear to be following suit and selecting locations well outside city limits to build new stores. One of the fastest growing suburbs has been Sugar Land, which lies about 20 miles away.
At the same time, Houston’s retail landscape continues to adapt to changing demographics in the area. This is most evidenced by the wave of new stores catering to diverse tastes.
Grocery success in Houston hinges on local knowledge, sourcing and marketing that caters to the city’s diverse cultural blend. Its large and growing Hispanic population (more than 40 percent) has fueled the success of local players like H-E-B, which excels in customer service, private label products and Tex-Mex favorites.
Reflecting on Houston’s multicultural spirit, several international grocery stores have opened their doors. Examples include Patel Brothers (Indian), Nippon Daido (Asian), Fiesta Mart (Hispanic) and Seafood City (Filipino).
National chains such as Kroger and Walmart remain strong in Houston with budget-conscious shoppers of all nationalities, especially younger demographics, who prioritize affordability.
Trader Joe’s, the quirky grocery chain known for its unique products and reasonable prices, recently announced plans to open its first Sugar Land location and its sixth in Houston. The store, which is slated to debut later this year, will be taking over space formerly run by a Sprouts Farmers Market, which was shuttered last year.
Trader Joe’s opened its first store in 1967 in Southern California and today includes more than 440 stores across the U.S.
Last fall, H-E-B celebrated the grand opening of its new e-commerce fulfillment center in Katy, Texas, about 30 miles outside of Houston. At more than 100,000 square feet, it is the largest of its kind that H-E-B has built. More than double the size of its other centers, the Katy facility was built to support the company’s home delivery and curbside orders in the Houston area.
The facility features cutting-edge technology and automated processes designed to enhance productivity and streamline workflow. This new facility employs more than 300 people and marks the seventh e-commerce fulfillment center H-E-B has opened in the past five years.
“The Houston market is one of the largest regions our company serves. We are excited to be offering innovative technologies to give our employee partners the tools they need to provide great service and a top-quality shopping experience for our customers,” said Kedar Patel, H-E-B group VP of e-commerce.
Gordon’s Food Service is expanding into Texas, having opened four of a planned six new locations in the Houston area. The family-managed distributor operates more than 175 locations across 13 states.
Often referred to as a gourmet Costco, Gordon’s serves businesses looking to buy in bulk as well as the public. But unlike Costco, membership isn’t required.
Gordon’s sells seasonal produce and meats by the piece or pound, meal solutions and ready-to-eat or ready-to-heat items such as fried and rotisserie chickens, ribs, deli sandwiches, cut fruit, handmade guacamole and fresh-squeezed juices. It also offers 15 types of fresh-popped popcorn.
Each of the Houston-area stores also has a tortilleria that makes fresh tortillas daily, a new feature created specifically for these stores.
When asked why the company picked the Houston market, Mark Dempsey, the director of marketing, called Houston “a very diverse and vibrant area.” As such, he said GFS is making sure to feature products that are relevant to the region and local community.
“When we looked at the Houston market, we felt that we really needed to make sure we included offerings that would specifically appeal to Houstonians. These locations offer a variety of made-in-house fresh options,” Dempsey said.
Each GFS store is typically between 25,000 and 30,000 square feet and employs an average of 40 full-time and part-time employees. The stores are equipped with walk-in coolers featuring cases of produce, meats and dairy items and offers services such as same-day delivery as well as online ordering for in-store pickup.
As Houston area retailers adjust to the changing market, more are focusing innovation on click-and-collect options, meal kits, healthy prepared foods, regional favorites and ethnic specialties.
Catering to busy lifestyles across a broad spectrum of demographics has translated into an increase in delivery service options in the area as well.
Read more market profiles from The Shelby Report.
